OPERATIONS
Through COVID-19, Community Impact Newspaper relies on strength of local journalism, smart business choices
Through COVID-19, Community Impact Newspaper relies on strength of local journalism, smart business choices. . .
It takes a lot to impress me. I’ve been around newspapers and printing for more than 30 years. I’ve been fortunate enough to be part of operations that were on the forefront of new technology and innovative thinking. I’ve shared new ideas with people from janitors to CEOS, and worked with newspapers that have closed their doors right up to ones who continue to flourish in these tough times.
COVID-19 has taken us to a dark place I never thought I’d see. Maybe I’m operating in a dream world (“Jerry’s world” as my wife and most of my employees call it), but in the period leading up to COVID-19, many of our community newspapers had just started scratching their way out of the hole we’ve dug over the past decade or so and started to see light at the end of the tunnel.
I’ve seen a resurgence in community support from advertisers, who I believe finally understand that our newspapers are right in there with them, supporting local news and local business as a partner in their success or failure. Much like in the case of COVID-19, we are all in this together.
Overnight, it seemed like the bottom fell out for us all. We went from a first quarter that was nothing short of spectacular to a second quarter that saw many less sustainable properties closing their doors, record drops in commercial print revenue, advertising revenue and changes in our business model that we may never recover from.
As many of you know by now, I remain a strong proponent of hyperlocal coverage and believe it is the path to success and sustainability for our industry. But with the recent “adjustments” to our staffing, particularly in newsrooms, who is going to continue to cover communities and spread the word to support local business and our economically challenged new COVID-19 impacted world?
One company, Community Impact Newspaper (CI), has provided me with an impressive story to share. CI is headquartered in Pflugerville, Texas and currently produces 35 print editions and covers 59 communities across Texas, Arizona, Tennessee and Georgia.
I recently exchanged emails with Lauren Itz, community relations manager at CI, to discuss how the company is handling things during this crisis. In one of her emails, she stated, “While everyone is in some way dealing with COVID-19, it’s also important to keep in mind that not every journalism operation is facing doom and gloom.”
Now, I was more curious than ever to hear how CI was planning on approaching the post-pandemic world from an operational, advertising, editorial and internal platform. One thing I wanted to learn was what was being done as we all come out of these rough times, and how things look through the eyes of CI for the future of print.
For answers to these questions, I spoke with CI CEO John Garrett. Our interview is below.
E&P: How has CI been affected by the recent downturn in preprints and ad revenues?
Garrett: We have been hit with a significant decline in advertising revenues. Local businesses are core to our business (so we haven’t had to suffer through preprint loss), but many of them are struggling to stay open. We have great local relationships, and our sales teams are taking a long-term approach to nurturing these relationships.
Our unique position in the marketplace as an essential business that helps inform residents and business leaders is a high honor to us. Although we are being hit hard with loss of revenue, we believe our future is secure in our communities because of the unique role we play. Community Impact Newspaper continues to be a light in the midst of all the uncertainty.
Although that uncertainty continues to exist, how optimistic are you that ROP revenue and preprints will return to PRE-COVID levels?
Garrett: We are optimistic that our ROP (we call it in-paper) revenue will return in the fall. Preprint is not a significant part of our business
What will be the driver for this to happen?
Garrett: Currently, our focus is on living out our purpose. We are prioritizing our staff ’s security—meaning no layoffs or furloughs— and we are committed to informing citizens right now. From a sales perspective, we have the hardest working, most committed sales team in the business that is bought into our mission and company. We will work our way out of this together with grit, determination, and purpose.
How soon does CI see this happening?
Garrett: We see that we have hit the bottom now, with slight improvement in June and uncertainty in July, but we see steady revenue improvements through the third quarter into Q4.
How has the recent COVID-19 economy changed the approach CI is taking in their markets?
Garrett: Editorially, our hyperlocal news operation is covering many stories of people helping each other and local businesses finding innovative ways to keep their companies afloat—and thriving, in many cases. We created a daily email newsletter product that has been very successful in keeping our readers updated daily. And we created a new “CI Patron” program that has allowed our loyal readers to help us financially.
As we all suffer with revenue challenges like our business has never seen, what thoughts went into not putting employee cost reduction steps into place?
Garrett: Jennifer (CI co-owner) and I had empathy for our employees in that no one wants to be furloughed or laid off in uncertain times, but on the other hand, we believe the best way (and maybe only way) out of this mess will be with our people fully engaged. Our reporters and editors have the market knowledge and sources to keep our paper relevant; our salespeople have the relationships to help local businesses navigate their way through this with advertising options; and our operations and management team knows what areas we can work on to improve efficiencies while maintaining our company values. We truly believe our best path forward is to invest in our people and we trust them to help us get to the other side. There is no question in our mind that this was a smart strategy to keep April and May, and June revenues are as high as we have been able to be considering what we were up against.
Have you put a hiring freeze into effect?
Garrett: Yes; we had to hold off new hires and open positions, although we have added new people in certain circumstances. We have cut back on expenses—although the shelter-in-place has also actually helped with expense reductions.
Could you please explain some of the outside-the-box approaches CI has taken throughout this crisis?
Garrett: We moved fast on some new programs. We converted our weekly email newsletter to a daily product. We also built in less than two weeks a homegrown Patron program that we see will have long-term benefit to us connecting to our readership in new ways, but the most outside-the-box thing we did was be open with staff on financials. It has helped us stay open and transparent, and the staff has let us know they appreciate the honesty. When times are good or times are bad, employees who know the financial situation will help the company achieve goals.
Will these carry over into POST-COVID times?
Garrett: Yes, our email newsletter, Patron program and open book management will continue.
As things open up around the country, advertising salespeople, as well as our customers, may continue to be weary of meeting face-to-face. With masks and gloves being a part of our new post COVID-19 world, how do you see this affecting advertising sales and direct interaction of our sales crews?
Garrett: We are taking a safety first, one day at a time approach to this.
While some argue that print publications are dying, CI has proven to be an exception. Has your hyperlocal news approach helped to maintain or grow your market penetration even in this difficult time? Have you seen growth even in this pandemic?
Garrett: Our model is a free, everyone gets it in the mail model, so naturally our circulation has grown with population growth. Our commitment to the company’s mission and our passion for hyperlocal news means we don’t give up during hard times. In addition to our strong print product, in recent weeks we have expanded our digital efforts by debuting these new offerings:
• Daily newsletters for 30+ hyperlocal editions (upgraded from weekly newsletters)
• Community Patron reader revenue model (nearly $50,000 in one-time or recurring contributions so far)
• Custom-developed digital planning tools (no third-party vendors) Executive editor Joe Lanane added,
“We believe these improvements will make us better than we were before coronavirus by building a long-term relationship with our digital readers now that our digital audience (2.5 million users in March) nearly matches our print audience (2.7 million mailboxes per month).”
Do you see the scales tipping between digital and print as an ongoing trend?
Garrett: For the foreseeable future, we see digital as a fraction (but profitable portion) of our total sales to print advertising revenues. Many believe that digital revenue is falling short of our original expectations.
As print revenues that have long supported publications and kept many local newspapers afloat continue to shrink and digital offerings grow, what are your feelings on maintaining a sustainable news operation?
Garrett: I can’t speak for other publications, but the data is clear to us: digital ad revenues and digital subscriptions will not support the future of our local journalism operation.
Many of us active in commercial printing have seen reductions in revenue tied to less page counts and print draws from our customers. How
has the recent pandemic affected this area of your business?
Garrett: Printing has been down for us as well. But we have a strong balance sheet and fundamentals and feel confident we can get through this crisis.
In 2016, CI opened a 36,000 square foot facility to print all of its publications under one roof, installing a $10 million press to complement its strong focus on print. How has COVID-19 slowed that progress, and what is the future of print for CI?
Garrett: We still see this as temporary challenge and as an opportunity. We see more growth in our short-term future.
On the operations side, what did you have in place to ensure the safety of your line employees (press, mailroom, etc.) throughout the more active parts of the pandemic?
Garrett: We are a safety-first shop and strive to provide the best work environment for all our employees. We didn’t just transition the convenient team members to WFH, we transitioned everyone that we feasibly could enable to work from home, even if it meant completely revamping job duties and internal processes.
For employees in our production side, who had to be on-site to produce and mail our physical goods, we followed all guidance recommended by OSHA, CDC, and local/ federal authorities. In addition, we took the steps below:
• single points of entry/exit were put in place
• restricted all outside vendors from excess unless deemed essential to our operation
• screened all incoming employees
• initiated mandatory hand washing during job changeovers and even started a hand washing competition on a weekly basis
• enforced maximum social distancing possible
• educated and hung signage across the whole facility
• adjusted cleaning crews to allow for elevated cleaning and disinfecting of premise during non-working hours
• removed as many points of contact as possible, from doors to reusable cups, across facility
• temporarily increased the hourly pay of our team members working on the production floor to ensure we met our mission as an organization
Moving forward, we will maintain a number of the improved processes that have been put in place. As we all know, any disease can spread through a facility causing unexpected absences and productivity loss. By ensuring we are continuing to follow our safety-first mantra, our employee’s safety isn’t just a values driven business decision, it is smart business.
Any disease can spread through a facility causing unexpected absences and productivity loss. By ensuring we are continuing to follow our safety-first mantra, our employee’s safety isn’t just a values driven business decision, it is smart business.